High-Cost Energy Crunch Shuts Down Century Aluminum Plant in 2022
At Century Aluminum, 600 laid-off American workers in Hawkesville, Kentucky are paying the immediate penalty for the Biden administration’s aggressive push to green energy. With natural gas prices tripling under the Biden regime, the second largest US aluminum mill has gone idle, shutting down due to “untenable energy prices” to quote CEO Jesse Gary from the August 10 report at Breitbart by John Binder.
And as we’ll soon see the nation’s largest aluminum producer, Alcoa, isn’t faring much better.
Industrial Electricity Rates To Reach Highest Levels Ever
Electricity rates for industrial customers are predicted to spike to their highest levels ever, according to US government forecasts. US plants and factories rely on both electricity and natural gas, so this could very well be the moment when “green energy” karma finally catches up with industry in the US.
Industrial operations across the board are in the shutdown crosshairs as outrageous energy bills are forcing companies to scale back, creating yet another drag on the economy that could accelerate the recession to all out 1930s style depression.
At least two steel mills have begun suspending some operations to cut energy costs. Industrial power costs are way up, posting a 24 percent increase from a year ago according to Energy Information Agency (EIA) data. That was last May, and the industrial forecast is getting worse for Q4 2022.
Sadly, warnings about the Biden administration’s green agenda overreach have gone unheeded, and now US industry is facing the inevitable karma of reckless energy and supply chain policies that benefited China more than the US in the Obama years.
The Alcoa Warrick line that was expected to be fully shut down by July 1, 2022 was only recently reopened under President Trump in 2017 after a glut of imported Chinese aluminum flooded the market and smelting operations ceased at Warrick in 2016 under the Obama administration.
Last May, a group of factories all across the Midwest warned federal energy regulators that some were on the verge of closing for the summer or longer due to what they called “unjust and unreasonable” electricity costs. The factory owners asked to be wholly absolved of some power fees, especially the requirement to pay for potential “capacity” to ensure an adequate power reserve when the grid is under extreme seasonal loads.
It Was Only a Matter of Time: Looming Shutdowns in the US
Around the world the energy cost crunch has already shuttered large chunks of European and Asian industries where green energy policies are even more aggressive.
“It was only a matter of time, really. Europe’s fertilizer plants, steel mills, and chemical manufacturers were the first to succumb. Massive paper mills, soybean processors, and electronics factories in Asia went dark.”-The US Industrial Complex Is Starting to Buckle From High Power Costs-Bloomberg
Now in the summer of 2022, it’s the US industry’s turn to face the consequences of what some industry higher-ups are calling Biden’s “fossil fool” energy policies. As one beleaguered coal-fired plant manager put it,
“Biden’s green energy policies don’t just put the cart before the horse. First, they shoot the horse.”
Century Aluminum Co. will now be forced to idle their Hawesville, Kentucky mill for up to a full year. This takes out of operation the biggest of the producer’s three major US sites. In the aluminum production industry, extensive shutdowns are not just a simple matter of pulling the plug and shutting off the plant lights.
A shutdown of this planned duration can easily take a month to complete, as plant workers “carefully swirl the molten metal into storage so it doesn’t solidify in pipes and vessels and turn the entire facility into a useless brick”, to use John Binder’s poignant description of the problem. Restarting is an involved procedure that can take six to nine months, so even if energy prices drop radically tomorrow, recovering 20% of the US aluminum supply won’t occur overnight.
For exactly this reason, plant owners don’t halt smelting operations unless they’ve exhausted all other options. But producing at a loss due to out-of-control energy prices is not an option for any business enterprise.
Michael Harris of Unified Energy Services LLC buys fuel for industrial clients. Procurement expert Harris points out that costs have risen so high that some companies are having to put millions of dollars of credit on the line just to secure power and gas contracts. “That can be devastating for a corporation”, said the industrial fuel buyer.
Alcoa Cuts Back Production in Warrick, Indiana
Century Aluminum isn’t alone in the struggle “just to keep the lights on” in a manufacturing environment where energy costs have skyrocketed. After Biden initiated the Keystone Pipeline shutdown and canceled oil and gas leases in what many are seeing as a premature rush to meet dubious “zero-carbon” benchmarks, ridiculous energy costs are sucking the profit out of US production.
Global bauxite and aluminum industry leader Alcoa also had bad news for the recently reopened smelting line in Warrick, Indiana, issued in a press release this July;
“Alcoa Corporation announced today that it will begin the process to immediately curtail one of three operating smelting lines at its Warrick Operations facility in Indiana due to operational challenges.”
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